Preparing your Business Plan

What is a Business Plan?

A business plan can serve a number of purposes, but it is principally designed to let you set down in words and figures the factors that are most important to your business. A business plan shows how a new business will be created or perhaps how an existing business will undergo a major change. In drawing up a plan, you will discover the strengths and flaws in your business idea and the best way to tackle any basic problems before they have the chance to arise in a real life situation.

When the business is up and running, a good plan will help keep you focussed on your main objectives and will allow you to check day-to-day decisions against your stated goals. A good business plan is also vital when you approach potential partners, your bank manager, government agencies or local authorities for finance, planning consent, grant aid etc.

Your plan needs to be persuasive and able to "sell" your company or idea to someone who will probably know a lot about how to run a business, but may know absolutely nothing about your product or market. It will demonstrate that your idea is viable, that it has been well thought out, that you are ready to go ahead and that you will survive and prosper.

Why do I need a Business Plan?

Your company may run perfectly well without a formal plan, but it will be doing so in a haphazard, unstructured way. Without a plan, you will have no clear idea where your business is going, no map to help you along the way and no means of getting back on track when things go wrong.

The plan really should be central to all businesses so that common goals, and the means by which they are to be reached, are clear to everyone in the organisation. You might even want to share some details of your plan with suppliers so that their role is also clear and everyone is singing from the same hymn sheet.

Unfortunately, many small businesses do not plan or will prepare a plan only for the...